BACKGROUND: The Sierra Club, in a current press release,
claims it is a myth that environmentalists caused California's
power shortage and says that they have not blocked or delayed
the construction of new power plants in the last 10 years. They
attribute California's power problems to deregulation and bad
planning by utilities.

TEN SECOND RESPONSE: As we speak, one of Sierra Club's
allies, the Environmental Defense Center, is moving to block construction
of a power plant near San Luis Obispo. Unsound environmental policy
is at the very root of California's problems.

THIRTY SECOND RESPONSE: Those who have fostered extreme
environmental regulations are contributing to California's energy
problems. Environmental groups have opposed nearly all energy
development. Unsound regulation and irrational environmental activism
will cause energy problems in other parts of the country in coming
years, resulting in economic hardship and loss of jobs, unless
we turn to sound, commonsense ways to protect the environment,
as well as our economy.

DISCUSSION: California did very little to deregulate
the electricity industry. The chief component of California's
"deregulation" was to put a cap on retail electricity
prices - a measure that hardly encourages energy conservation.
However, at the urging of a variety of extreme environmental groups,
including the Sierra Club, the state led the nation in erecting
environmental regulatory barriers to the construction of power
plants and transmission lines. The result has been that the process
of permitting and building a power plant in California takes ten
years, as opposed to two to three years in many states, such as
Texas, from which California is now buying power. Further complicating
matters is that there is a high likelihood that permits will be
denied at any time during the eight year permitting process. Also,
at any time during the two-year construction process, lawsuits
and protests are likely to halt work. As a result, industry officials
say they can do very little planning and most projects are killed
before reaching the permitting stage.

This is not to say that the NIMBY (not in my back yard) principle
has not also been at work in areas where aesthetic concerns have
been put ahead of necessary solutions to problems. For example,
in Silicon Valley, Cisco Systems, manufacturer of equipment for
energy-devouring Internet server farms, is blocking construction
of the Calpine power plant because it would intrude on the view
from their planned new headquarters.

There are, however, many more ways in which environmentalists
have contributed to California's and the nation's spreading energy
crisis. Tougher emissions standards, particularly for NOX, are
causing many of California's power plants to be shut down for
extended periods to install new emissions controls. Nationwide,
power generators are switching to natural gas to meet ever-tougher
emissions standards - even as environmental groups such as Sierra
Club block drilling for natural gas.

SPECIAL NOTE: Bowing to pressure from environmental groups,
the last week in January the California Air Resources Board voted
to require automakers to sell specific numbers of zero-emission
vehicles (ZEVs) beginning in 2003. The move triggers similar legislation
in Massachusetts, New York and Vermont. ZEVs run on - you guessed
it- electricity.

by Tom Randall, Director
John P. McGovern, MD Center for Environmental and Regulatory Affairs
The National Center for Public Policy Research

Contact the author at: 773-857-5086 or [email protected]
The National Center for Public Policy Research
Chicago office
3712 North Broadway - PMB 279
Chicago, IL 60613